Exhibit 10.5


 


AGREEMENT


 


This Agreement dated as of June 30, 2008 (this “Agreement”),
is made by and between Oxford Finance Corporation (“Lender”) and Favrille, Inc.
a Delaware corporation (“Borrower”).


 


WITNESSETH:


 


A.            Lender and Borrower are parties to that
certain Master Security Agreement dated as of July 26, 2004, as amended by
an Amendment dated as of December 29, 2004, an Amendment dated June 16,
2005, an Amendment dated December 30, 2005 and a Loan Amendment Agreement
dated as of May 16, 2008, pursuant to which Lender made a series of loans
(the “Loans”) to Borrower arising under and evidenced by a series of promissory
notes delivered by Borrower to Lender (the foregoing Master Security Agreement,
the promissory notes, this Agreement, and any other documents evidencing or
relating to the obligations arising thereunder, as any such documents may have
been amended, restated, modified or supplemented from time to time, are
hereafter referred to as the “Loan Documents”), which Loans are secured by a
security interest in certain property owned by Borrower (the “Collateral”).


 


B.            A default occurred under the Loan
Documents on or about June 4, 2008, thus entitling Lender to exercise its
legal rights and remedies.  On or about June 5
and 6, 2008, Lender and General Electric Capital Corporation (“GE Capital”),
another secured creditor of Borrower, delivered notices of exclusive control
(the “Control Notices”) to certain financial institutions at which Borrower
maintained funds.  On or about June 11,
2008, Lender and GE Capital notified those financial institutions to deliver
funds to Lender and to GE Capital.


 


C.            Pursuant to the Control Notices, Lender
received $3,795,101.99 on or about June 11, 2008.  On or about June 17, 2008, Lender
notified Borrower of such receipt and of how such funds were applied.  Lender also demanded repayment of the balance
that Lender contended was still owing.


 


D.            A portion of the funds that Lender
received was applied by Lender on account of a prepayment charge that Lender
contends was owed to it.  Borrower has
disputed Lender’s entitlement to receive the prepayment charge.


 


E.             Borrower and Lender desire to resolve
that dispute, to settle any remaining issues under the Loan Documents, and to
provide each other with mutual releases of claims.


 


F.             Borrower has informed Lender that it is
concurrently entering into an Agreement with GE Capital (the “Borrower/GE
Capital Agreement”) that resolves Borrower’s similar dispute with GE Capital.


 


NOW, THEREFORE, in consideration of the premises, the
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties do hereby agree as follows:


 


STATEMENT
OF TERMS


 


.24           Acknowledgment of Recitals. 
Borrower and Lender acknowledge the accuracy of the recitals set forth
above.


 


.25           GE Capital Wire Transfer.  No
later than two business days after Borrower’s execution and delivery of this
Agreement (“Execution Date”) and GE Capital’s receipt of an executed copy of the
Borrower/GE Capital Agreement and this Agreement, GE Capital shall send a wire
transfer for the benefit of


 

















 


Borrower in the amount of $54,920.28 (the “GE
Transfer”).  At Borrower’s request, the
GE Transfer will be sent by GE Capital to Lender.  Borrower has informed GE Capital that it is
concurrently entering into this Agreement with Lender (the “Borrower/Oxford
Agreement”) that resolves Borrower’s similar dispute with Lender and that,
pursuant thereto, Lender is to receive the Transfer directly from GE
Capital.  GE Capital is not a party to
the Borrower/Oxford Agreement and has no responsibility to Borrower or to
Lender with regard thereto; provided that GE Capital shall not be obligated to
send the Transfer until it has received an executed copy of this Ageement.


 


.26           Favrille Wire Transfer.   No later than two business days after Borrower’s
execution and delivery of this Agreement, Borrower shall send a wire transfer
to Lender in the amount of $46,742.85 (the “Favrille Transfer”).  The Favrille Transfer consists of principal
in the amount of $46,490.61 and interest in the amount of $252.24 through June 30,
2008.  The principal amount will bear
interest at the rate of $13.28 per day commencing on July 1, 2008 and
continuing until Lender has been paid in full.


 


.27           Resolution of Dispute.  Borrower
and Lender agree that Lender’s receipt of the GE Transfer and the Favrille
Transfer and the mutual releases contained herein are in full satisfaction of
the prepayment charge dispute and that, with the exception of the matters
referred to in Section 5 and Section 9 of this Agreement, constitute
a full and final settlement of all outstanding obligations between them arising
out of the Loan Documents.


 


.28           Matters that Survive Repayment of the Loan. 
Notwithstanding the provisions of Section 4 of this Agreement or
the release set forth herein, Borrower shall continue to remain obligated to
Lender with respect to those terms and provisions in the Loan Documents, if
any, that by their terms or by their nature survive payment in full of the
Loans and related obligations, including any indemnities.


 


.29           Release of Liens on Collateral. 
Lender agrees that all liens and security interests held by it in any
Collateral shall be deemed immediately and automatically released on the date
that this Agreement is executed and delivered by the parties hereto (the “Agreement
Effective Date”).  Lender agrees to
execute and deliver to Borrower, at Borrower’s expense, such documents as
Borrower shall reasonably request in order to evidence the release of such
liens and security interests.  Borrower
is authorized to file for recordation UCC-3 termination statements covering all
financing statements recorded and/or filed by or on behalf of  Lender with respect to the Loan Documents
(but not any financing statements that may have been filed by Lender with
regard to obligations outside the scope of the Loan Documents), including, but
not limited to, those set forth in Exhibit A attached hereto and
incorporated herein: provided, however, where such file number(s) relate
to filings made jointly by Lender and GE Capital (“Joint UCC-1 Filings”),
Borrower shall wait until it also has authority from Lender and GE Capital to
terminate the Joint UCC-1 Filings.  
Within 2 business days after the Execution Date, Lender shall deliver
written notice to the bank or other financial institution that is party to the
following account control agreements that Lender is terminating Lender’s rights
under the account control agreement:  a)
Securities Account Control Agreement/Oxford/Silicon Valley Bank dated 12/29/05 –
Account No. 48600699, b) Securities Account Control Agreement/Oxford &
GECC/Bear Stearns dated 12/29/05, c) Securities Account Control
Agreement/Oxford & GECC/State Street Bank dated 12/29/05, and d)
Deposit Account Control Agreement/Oxford & GECC/ Silicon Valley Bank
dated 12/29/05 with respect to the following accounts: 300275403, 3300295983,
3300261889 and, 3300368044.  Lender’s
notice shall not terminate any rights of GE Capital and Borrower understands
that it will need to make separate arrangements with GE Capital for GE Capital
to terminate its interest in such accounts.


 


.30           Release of Lender by Borrower.  Borrower
hereby releases, remises, acquits and forever discharges Lender and each of its
employees, agents, representatives, consultants, attorneys, fiduciaries,
officers, directors, partners, predecessors, successors and assigns, subsidiary
corporations, parent corporations, and related corporate divisions
(collectively, the “Lender Released Parties”), from any and all actions and
causes of action, judgments, executions, suits, debts, claims, demands,
liabilities, obligations, damages and expenses of any and every character,
known or unknown, direct and/or indirect, at law or in equity, of


 

















 


whatsoever kind or nature, for or because of any
matter or things done, omitted or suffered to be done by any of the Lender
Released Parties prior to and including the Agreement Effective Date, which
arises out of or is connected to the Loan Documents (collectively, the “Borrower
Released Matters”).  Borrower
acknowledges that the agreements in this Section are intended to be in
full satisfaction of all or any alleged injuries or damages arising in
connection with the Borrower Released Matters.


 


Without limiting the
generality of the foregoing, Borrower hereby waives the provisions of any
statute that prevents a general release from extending to claims unknown by the
releasing party.  By entering into this
release, Borrower recognizes that no facts or representations are ever
absolutely certain and it may hereafter discover facts in addition to or
different from those which it presently knows or believes to be true, but that
it is the intention of Borrower to hereby to fully, finally and forever settle
and release all matters, disputes and differences, known or unknown, suspected
or unsuspected.  Accordingly, if Borrower
should subsequently discover that any fact that it relied upon in delivering
this release was untrue, or that any understanding of the facts was incorrect,
Borrower shall not be entitled to set aside this release by reason thereof,
regardless of any claim of mistake of fact or law or any other circumstances
whatsoever.  Borrower acknowledges that
it is not relying upon and has not relied upon any representation or statement
made by Lender with respect to the facts underlying this release or with regard
to Borrower’s rights or asserted rights.


 


This release may be pleaded
as a full and complete defense and/ or as a cross-complaint or counterclaim
against any action, suit, or other proceeding that may be instituted,
prosecuted or attempted in breach of this release.  Borrower acknowledges that the release
contained herein constitutes a material inducement to Lender to enter into this
Agreement and that Lender would not have done so but for its expectation that
such release is valid and enforceable in all events.


 


.31           Release of Borrower by Lender.  Lender
hereby releases, remises, acquits and forever discharges Borrower and each of
its employees, agents, representatives, consultants, attorneys, fiduciaries,
officers, directors, partners, predecessors, successors and assigns, subsidiary
corporations, parent corporations, and related corporate divisions
(collectively, the “Borrower Released Parties”), from any and all actions and
causes of action, judgments, executions, suits, debts, claims, demands,
liabilities, obligations, damages and expenses of any and every character,
known or unknown, direct and/or indirect, at law or in equity, of whatsoever kind
or nature, for or because of any matter or things done, omitted or suffered to
be done by any of the Borrower Released Parties prior to and including the
Agreement Effective Date, which arises out of or is connected to the Loan
Documents (collectively, the “Lender Released Matters”).  Lender acknowledges that the agreements in
this Section are intended to be in full satisfaction of all or any alleged
injuries or damages arising in connection with the Lender Released Matters.


 


Without limiting the generality
of the foregoing, Lender hereby waives the provisions of any statute that
prevents a general release from extending to claims unknown by the releasing
party.  By entering into this release,
Lender recognizes that no facts or representations are ever absolutely certain
and it may hereafter discover facts in addition to or different from those
which it presently knows or believes to be true, but that it is the intention
of Lender to hereby to fully, finally and forever settle and release all
matters, disputes and differences, known or unknown, suspected or
unsuspected.  Accordingly, if Lender
should subsequently discover that any fact that it relied upon in delivering
this release was untrue, or that any understanding of the facts was incorrect,
Lender shall not be entitled to set aside this release by reason thereof,
regardless of any claim of mistake of fact or law or any other circumstances
whatsoever.  Lender acknowledges that it
is not relying upon and has not relied upon any representation or statement
made by Borrower with respect to the facts underlying this release or with
regard to Lender’s rights or asserted rights.


 


This release may be pleaded
as a full and complete defense and/ or as a cross-complaint or counterclaim
against any action, suit, or other proceeding that may be instituted,
prosecuted or attempted in breach of this release.  Lender acknowledges that the release
contained herein constitutes a material inducement to Borrower to enter into
this Agreement and that Borrower would not have done so but for its expectation
that such release is valid and enforceable in all events.


 

















 


.32           Effect of Insolvency Proceeding. This Agreement shall remain in full force and
effect and continue to be effective should Borrower become the subject of any bankruptcy
or insolvency proceeding. 
Notwithstanding the provisions of Section 4 of this Agreement or
the release set forth herein, if in connection with any such proceeding, any
action is commenced against Lender seeking to have any payment received by Lender
returned, disgorged, rescinded, set aside, or reduced in amount, then the
release set forth herein from Lender to Borrower shall no longer be of any
force or effect and Lender shall be entitled to assert all claims against
Borrower that it would have been entitled to assert had this Agreement not been
entered into and, among other things, to seek return to Lender of the
Transfer.  The rescission of the release
by Lender shall not affect the release by Borrower.


 


.33           Counterparts. This
Agreement may be executed in multiple counterparts, each of which shall be
deemed to be an original and all of which when taken together shall constitute
one and the same document.  Any signature
delivered by a party via facsimile or electronic transmission shall be deemed
to be an original signature hereto.


 


.34           Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF DELAWARE
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE WITHOUT REGARD TO THE
PRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS.


 


[Remainder of Page Intentionally Left
Blank; Signatures Begin on Next Page]


 

















 


IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed and delivered as
of the day and year specified at the beginning hereof.


 


 


	
   

  	
  FAVRILLE,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  

  	
  Tamara
  A. Seymour

  	
   

  
	
   

  	
  Name:  

  	
  Tamara A. Seymour

  	
   

  
	
   

  	
  Title:  

  	
  Chief Financial Officer

  	
   

  



 


 


	
   

  	
  OXFORD
  FINANCE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  

  	
  T.
  A. Lex

  	
   

  
	
   

  	
  Name: 

  	
   

  	
  T. A. Lex

  	
   

  
	
   

  	
  Title: 

  	
  Duly Authorized Signatory

  	
   

  
						



 


 


GE Capital acknowledges receipt of this Agreement and
has no objection to it.  GE Capital
agrees that it has no claims against Lender arising from the intercreditor
agreement between them and from Lender’s receipt of collateral proceeds from
accounts of Borrower and waives and releases any claims, known or unknown, that
it has or may have against Lender.


 


 


	
   

  	
  GENERAL ELECTRIC
  CAPITAL CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  

  	
  Jason
  Dufour

  	
   

  
	
   

  	
  Name:  

  	
   

  	
  Jason Dufour

  	
   

  
	
   

  	
  Title: 

  	
  Duly Authorized Signatory

  	
   

  
						



 


Exhibit A


 


Joint
UCC GE and Oxford UCC Filings):


 


	
  UCC No.

  	
   

  	
  File Date

  	
   

  	
  Secured Parties

  
	
  54070406

  	
   

  	
  12/30/2005

  	
   

  	
  GE & Oxford

  



 


Oxford
UCC Filings :


 


	
  UCC No.

  	
   

  	
  File Date

  	
   

  	
  Secured Party

  
	
  42497719

  	
   

  	
  9/3/2004

  	
   

  	
  Oxford

  
	
  43153071

  	
   

  	
  11/4/2004

  	
   

  	
  Oxford

  
	
  43688191

  	
   

  	
  12/30/2004

  	
   

  	
  Oxford

  
	
  51439638

  	
   

  	
  4/28/2005

  	
   

  	
  Oxford

  
	
  51992107

  	
   

  	
  6/28/2005

  	
   

  	
  Oxford

  
	
  53469344

  	
   

  	
  11/1/2005

  	
   

  	
  Oxford

  
	
  60016576

  	
   

  	
  12/27/2005

  	
   

  	
  Oxford